Nigerian fintech giant, Flutterwave, has developed a product named “Swap”, backed by the Central Bank of Nigeria (CBN), in its bid to revolutionise the way Nigerians access foreign currency, and address key challenges in the current FX landscape.
Flutterwave’s Swap is the result of a partnership with Wema Bank, one of Nigeria’s leading commercial banks, and Kadavra BDC. The collaboration aims to leverage the strengths of each entity, with Flutterwave utilising its International Money Transfer Operator license, Kadavra contributing its BDC license, and Wema Bank providing comprehensive support throughout the process.
Addressing FX Market Challenges
Acting governor of the CBN, Mr. Folashodun Shonubi, highlighted the potential impact of Swap in resolving issues facing Nigeria’s FX market. These issues include a lack of collaboration among financial institutions and a heavy reliance on cash transactions. Shonubi emphasized that Swap could bring about increased collaboration and reduce the dependence on physical currency.
Also speaking on the challenges, Flutterwave CEO, Olugbenga Agboola, stated, “we understand the FX access challenges individuals and businesses face. Swap is our answer to those pain points, providing a seamless and efficient platform for currency exchange.”
Digital Transformation and Regulation
As part of the digital transformation agenda, Shonubi also stated that business development companies (BDC) against digitisation would gradually be phased out. The CBN aims to make the FX market cashless, differentiating between regulated BDCs and unregulated transactions. The central bank plans to closely monitor all transactions on the Swap platform to ensure compliance and curb unregulated foreign transactions.
User Verification and Documentation
To access the Swap platform, users must undergo a thorough identity verification process, including the submission of essential documents such as their bank verification number, a selfie, and supporting documentation explaining the reason for needing foreign exchange. This stringent verification process is designed to enhance security and regulatory compliance.
Available Currencies and Future Plans
Swap, currently accessible only through Flutterwave’s web app, facilitates the exchange of dollars, euros, and pounds for registered Nigerian users. Additionally, Flutterwave has announced plans to issue cards starting in October, providing swift access to Personal Travel Allowance (PTA) and Business Travel Allowance (BTA). The platform will also be made available via API for banks, further expanding its reach.
Flutterwave’s Swap is positioned as a solution to the challenges faced by individuals and businesses in accessing foreign exchange. With the CBN supporting this digital initiative, it marks a significant step towards modernising Nigeria’s FX market, potentially offering a more efficient and regulated alternative to traditional channels.